Determinants of growth in government expenditure: An empirical analysis of Nigeria

Abstract

This study seeks to ascertain the growth in government expenditure and determine the factors responsible for this growth. In this study, we examined 4 determinants of growth in public expenditure: Inflation, Public debt, tax revenue and population. The data collected for these variables were subjected to the ordinary least square regression analysis. The results indicate that: inflation has a negative relationship with total government expenditure (TGEX); population has a positive relationship with TGEX; public debt has a significant positive relationship with TGEX; and tax revenue has a significant positive relationship with TGEX. This shows that these variables are the major determinants of growth in the Government Expenditure. We recommend, therefore, that the fiscal responsibility bill in the National Assembly should always be passed into law on time to reduce budget deficit and public debt and their effects on the economy. © 2011 Academic Journals Inc.